Because learning changes everything.
Chapter 7
Organization,
Teamwork, and
Communication
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Learning Objectives
7-1 Explain the importance of organizational culture.
7-2 Describe how organizational structures develop.
7-3 Describe how specialization and departmentalization help an
organization achieve its goals.
7-4 Determine how organizations assign responsibility for tasks and
delegate authority.
7-5 Compare and contrast some common forms of organizational
structure.
7-6 Distinguish between groups and teams.
7-7 Identify the types of groups that exist in organizations.
7-8 Describe how communication occurs in organizations.
7-9 Analyze a business’s use of teams.
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Organizational Culture
Organizational culture—A firm’s shared values, beliefs,
traditions, principles, rules, and role models for behavior.
Formal culture.
• Mission statement.
• Codes of ethics.
• Memos, manuals, and ceremonies.
Informal culture.
• Dress codes and work habits.
• Extracurricular activities and stories.
• Discussions with co-workers.
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Organizational Culture at Zappos
The Zappos tagline “Powered by Service” emphasizes the company’s
focus on its customers.
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POLLING QUESTION 1
Which of the following statements is TRUE?
A. A code of ethics is a formal expression of culture.
B. When values are shared by all members of an
organization, they cannot be expressed in its relationships
with customers.
C. Organizational culture is a visual display of the
organizational structure.
D. Discussions with coworkers are a formal expression of
culture.
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Developing Organizational Structure
Structure—The arrangement of positions within an
organization.
Structure is developed when:
• Managers assign work tasks to specific individuals or groups.
• Coordinate activities to reach the firm’s objectives.
Organizational chart—Visual display of the organization’s
structure.
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Figure 7.1 The Evolution of a Clothing
Store, Phases 1, 2, and 3
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Assigning Tasks 1
Specialization—the division of labor into small, specific
tasks and the assignment of employees to do a single task.
Reasons to specialize:
• Efficiency.
• Workers do not waste time shifting from one job to another.
• Training is easier.
Overspecialization can have negative effects.
• Boredom.
• Dissatisfaction.
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Assigning Tasks 2
Departmentalization—The grouping of jobs into working
units usually called departments, units, or divisions.
Common ways to departmentalize:
• By function.
• By product.
• By geographic region.
• By customer.
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Functional Departmentalization
The grouping of jobs that perform similar functional activities,
such as finance, manufacturing, marketing, and human
resources.
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Product Departmentalization
The organization of jobs in relation to the products of the
firm.
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Geographic Departmentalization
The grouping of jobs according to geographic location, such
as state, region, country, or continent.
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Departmentalization at Coca-Cola
The Coca-Cola Company has four operating regions: Asia Pacific;
Europe, Middle East & Africa; Latin America; and North America.
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Customer Departmentalization
The grouping of jobs around the needs of various types of
customers.
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Assigning Responsibility 1
Delegation of authority—Not only giving tasks to
employees, but empowering them to do whatever is
necessary to carry out those tasks.
As a business grows, so do the number and complexity of
decisions that must be made.
• No one manager can handle them all.
Responsibility.
Accountability.
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Assigning Responsibility 2
Degree of centralization—Extent to which authority is
delegated throughout an organization.
Centralized organizations.
• Authority is concentrated at the top; little decision-making delegated to
lower levels.
Decentralized organizations.
• Decision-making authority delegated as far down the chain of
command as possible.
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Centralized Organizations
The United States Postal Service is a centralized organization which
limits routine business decisions post offices can make.
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Assigning Responsibility 3
Span of management—The number of subordinates who
report to a particular manager.
Wide span of management.
• Exists when a manager directly supervises a very large number of
employees.
Narrow span of management.
• Exists when a manager directly supervises only a few subordinates.
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Assigning Responsibility 4
Organizational structure—The levels of management in an
organization.
A company with many levels is considered tall.
• Span of management is narrow.
A company with few levels is considered flat.
• Span of management is wide.
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Figure 7.3 Span of Management: Wide
Span and Narrow Span
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POLLING QUESTION 2
Sweta has 150 employees who report to her. These 150
employees would be classified as her _____.
A. Span of management.
B. Span of employees.
C. Governing body.
D. Governing employees.
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Forms of Organizational Structure 1
Line structure.
• Simplest organizational structure.
• Direct lines of authority extend from top management to
employees at the lowest levels.
• Most common in small businesses.
Line-and-staff structure.
• Traditional line relationship between superiors and
subordinates.
• Specialized managers assist line managers.
• May experience problems with overstaffing, ambiguous lines of
communication.
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Figure 7.4 Line Structure
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Figure 7.5 Line-and-Staff Structure
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Forms of Organizational Structure 2
Multidivisional structure.
• Organizes departments into larger groups called divisions.
• Permits delegation of decision-making authority.
• Inevitably creates work duplication.
• Restructure.
Matrix structure.
• Sets up teams from different departments; creates two or more
intersecting lines of authority.
• Provides flexibility, enhanced cooperation, creativity.
• Generally expensive and complex.
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Figure 7.6 Matrix Structure
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The Role of Groups and Teams in
Organizations 1
All teams are groups, but not all groups are teams.
Group.
• Two or more individuals who communicate with one another,
share a common identity, and have a common goal.
Team.
• Small group whose members have complementary skills; have a
common purpose, goals and approach; and hold themselves
accountable.
• Virtual teams.
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Table 7.1 Differences between Groups and
Teams
Working Group Team
Has strong, clearly focused leader Has shared leadership roles
Has individual accountability Has individual and group accountability
Has the same purpose as the broader Has a specific purpose that the team
organizational mission itself delivers
Creates individual work products Creates collective work products
Runs efficient meetings Encourages open-ended discussion and
active problem-solving meetings
Measures its effectiveness indirectly Measures performance directly by
by its effects on others (for example, assessing collective work products
financial performance of the business)
Discusses, decides, and delegates Discusses, decides, and does real work
together
Source: Robert Gatewood, Robert Taylor, and O. C. Ferrell, Management: Comprehension Analysis and Application (New
York: McGraw-Hill Education, 1995), p. 427.
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The Role of Groups and Teams in
Organizations 2
Committees.
• Permanent, formal group that performs a specific task.
Task forces.
• Temporary group of employees responsible for bringing about a
particular change.
• Membership based on expertise rather than position.
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The Role of Groups and Teams in
Organizations 3
Teams.
• Project teams.
• Product-development teams.
• Quality-assurance teams (quality circles).
• Self-directed teams (SDT).
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Communicating in Organizations 1
Formal and Informal Communication.
Formal communication channels.
• Intentionally defined.
• Designed by the organization.
Informal organization.
• Consists of friendships and other nonwork social relationships.
• The grapevine is the most significant informal type of communication.
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Figure 7.7 The Flow of Communication in
an Organizational Hierarchy
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Table 7.2 Types of Formal Communication
Type Definition Examples
Upward Flows from lower to higher levels of the Progress reports, suggestions for
organization improvement, inquiries, grievances
Downward Traditional flow of communication from Directions, assignments of tasks
upper organizational levels to lower and responsibilities, performance
organizational levels feedback, details about strategies
and goals, speeches, employee
handbooks, job descriptions
Horizontal Exchange of information among Task forces, project teams,
colleagues and peers on the same communication from the finance
organizational level, such as across or department to the marketing
within departments, who inform, department concerning budget
support, and early on coordinate requirements
activities both within the department
and between other departments
Diagonal When individuals from different levels A manager from the finance
and different departments department communicates with a
communicate lower-level manager from the
marketing department
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Communicating in Organizations 2
Monitoring Communications.
Technological advances and increased use of electronic
communication have made monitoring communications in the
workplace necessary.
Failure to monitor employees’ use of technology can be costly.
Artificial intelligence (AI) is significantly impacting workplace
monitoring, benchmarking, and understanding how employees feel
about their jobs.
• More than 40 percent of employers globally have implemented AI
processes.
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POLLING QUESTION 3
Managers at Alpha Beta Corporation have noticed a
significant drop in productivity at its call center. They attribute
this to employees using social media on their smartphones
while on the clock. In your opinion, what is the best option to
handle this?
A. Implement a zero smartphone use policy.
B. Allow smartphone usage for employees who consistently
reach daily goals.
C. Only allow smartphone usage during breaks or lunch.
D. Establish a specific area where smartphone usage is
allowed.
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Communicating in Organizations 3
Improving Communication Effectiveness.
• Encourage employees to provide feedback, even if it is
negative.
• Encourage mangers to listen.
• Avoid interruptions.
• Develop strong and effective communication channels and
communicate policies throughout the organization.
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