Goals:

• Understand important principles in designing an effective organization
• Compare alternative organizational structures for business.

Key Terms:

• mission statement
• goal
• policies
• procedures
• organization chart

Organizational Structure for Businesses

• Designing an Effective Business Organization – It is not easy to create a successful business. Many new businesses fail in the first few years. Successful businesses need more than a good product or service. Skilled managers, well-prepared and motivated employees, adequate resources, and effective procedures add to business success. A business needs to be well organized to help people do their work properly. An effective business begins with a clear purpose and the application of key principles for organizing work.
• Setting Direction – direction for a business comes from its mission statement. A   mission statement is a short, specific written statement of the reason a business exists and what it wants to achieve. 
• Starbucks mission statement is to : “Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.
  • Six guiding principles to measure their progress
  • Their work environment
  • Diversity
  • High standard
  • Satisfied  customers
  • Clean environment
  • Profits
• After the mission statement is developed, the business sets goals. A goal is a precise statement of results the business expects to achieve.
  • To define what needs to be accomplished
  • To determine if the business is successful
• Finally, the business sets policies and procedures providing guidance and direction to people working in the organization.
  • Policies – guidelines used in making consistent decisions
  • Procedures – descriptions of the way the work will be done
• Principles of Effective Organization – several principles guide the effective organization  of work
• Responsibility – the obligation to complete specific work
• Authority – the right to make decisions about how responsibilities should be accomplished
• Accountability – taking responsibility for the results achieved
• In an effective organization, all managers and employees have a set of responsibilities as a part of their jobs. With every job assignment, they know that they have the authority to make the decisions and obtain the resources needed to complete the assignment. They know they will be recognized and rewarded if they are successful. They know they will be held accountable if the work is not completed well.
• Unity of Command – means there is a clear reporting relationship for all staff of a business. For each work assignment, people know how is the leader and how decisions will be made.
• Span of Control – the number of employees who are assigned to a particular work task or manager. Organizations need to make sure that workers have a balance of supervision and freedom to do their work.
• Types of Organizational Structures – When more peoplearehired, there will need to be an agreement on what work each person will do and if one person has authority over the work of others. Organizational chart – a diagram that shows the structure of an organization , classifications of work and jobs, and the relationships among those classifications.
• Functional Organization Structure – used by most businesses. Work is arranged within business functions
• Production
• Operations
• Marketing
• Human resources
• All of the people with jobs related to one of the functions will work together and report to managers responsible for that function
• Advantage – people work with others who share their skill
• Disadvantages – people become more focused on their specific function than on the success of the whole business and people have little interaction with people in other parts of the business
• Matrix Organizational Structure - work is scheduled around specific projects, products, or customer groups. Designed to overcome the drawbacks of the functional organization structure. People with varied backgrounds are assigned together because  their expertise is required for the project or to serve the customer.
• Advantage – Can be interesting and motivating to employees. Work with many different people. Employees are focused on a specific project or task.
• Disadvantage – Can be confusing and ineffective without effective leadership and communication

Assignments:

Using Word or Inspiration
1. Create an Organizational Chart for Copperas Cove High School as it exists today.
2. Create an Organizational Chart for CCHS as you wish it was.