BUS 100 Lecture Notes - Departmentalization, Organizational Chart, Profit Center

• School: UFV
• Department: Business Administration
• Course: BUS 100
• Professor: Kim Milnes

Document Summary

Chain of command = reporting relationships within a business; the flow of decision making power. Advantages: more efficient, jobs easier to lean, easier to replace people. Disadvantages: narrow jobs, boredom, loss of overall organizational picture: departmentalization, the process of grouping jobs into logical units. Allows top managers to better assess sectional performance. Each department acts as profit centre (separate company responsible for own costs/profits: departmentalization focuses on 1(or more) of: functional, customer, product, process, geographic. Functional departmentalization (1) according to functions of activities (2) ex. Production dept. , sales dept. , accounting/finance dept. , etc. (3) pros: focuses on key activities, prevents duplication of work, simple structure (4) cons: conflicts between depts. , lack of overall picture, slow decision making. Customer departmentalization (1) according to types of customers likely to buy given product (2) ex. Product departmentalization (1) according to the products being created or sold. Bus 100 (2) ex. (bank) consumer loans, commercial loans, personal banking.