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Chapter 8 - Making the Move Toward Customer-Driver Business Organizations

Terms

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What is *Economy of Scale*?
The situation in which companies can produce goods more inexpensively if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase.
What is *Downsizing*?
The process of eliminating managerial and non-managerial positions.
Whath is *Organizational Design*?
The structuring of workers so that they can best accomplish the firm's goals.
What is *Hierarchy*?
A system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.
What is *Bureacracy*?
An organization with many layers of managers who set rules and regulations and oversee all decisions.
What is *Empowerment*?
Giving employees authority and responsibility to make decisions and please customers.
What were Henri Fayoul's principles?
1. Utility of command, 2. Hierarchy of Authority, 3. Division of labor, 4. Subordination of individual Interests to the general interest, 5. Authority, 6. Degree of centralization, 7. Clear communications channel, 8. Order, 9. Equity, 10. Espirit de corps.
What is *Restructuring*?
Redesigning an organization so that it can more effectively and efficiently serve its customers.
What is a *tall organizational structure*?
The continuous adding of layers of management to an organization.
What is a *flat organizational structure*?
An organizational structure that emphasizes less layers of management.
What is *Span of Control*?
The optimum number of subordinates a manager supervises or should supervise.
Whath is *Departmentalization*?
The dividing or organizational functions into separate units.
What is *Centralized Authority*?
An organization structure in which decision-making authority is maintained at the top level of management at the company's headquarters.
What is *Decentralized Authority*?
An organization structure in which decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be.
Define *Line Organization*
An organization that has direct two-way lines of responsibility, authority, and communications running from the top to the bottom of the organization with all people reporting to only one supervisor.
Define *Line Personnel*
Employees who perform functions that contribute directly to the primary goals of the organization.
Define *Staff Personnel*
Employees who perform functions that assist line personnel in achieving their goals.
What is a *Matrix Organization*?
An organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a traditional line-and-staff structure.
What is a *Cross Functional Team*?
Groups of employees from different departments who work together on a semi-permanent basis.
What is *Networking*?
Using communications technology and other means to link organizations and allow them to work together on common objectives.
What is *Real-Time*?
The present moment or the actual time in which something takes place; data sent over the Internet to various organizational partners as they are developed or collected are said to be available in real-time.
Define *Transperency*
A concept that describes a company being so open to other companies working with it that the once-solid barriers between them "see-through" and electronic information is shared, often times on the Extranets, as if the companies were one.
What is a *Virtual Corporation*?
A temporary, networked organization made up of replaceable firms that join in the network and leave it as needed.
What is an *Extranet*?
An extension of the Internet that connects suppliers, customers and other organizations via secure websites.
What is an *Intranet*
A set of communications links within one company that travel over the Internet but are closed to public access.
What is *Total Quality Management - TQM*?
The practice of striving for customer satisfaction by ensuring quality from all departments in an organization.
What is *Continuous Improvement*?
Constantly improving the way the organization does thins so that customer needs can be better satisfied.
What is *Reengineering*?
The fundamental rethinking and RADICAL redesign of organizational processes to achieve DRAMATIC improvements in critical measures of performance.
What is an *Inverted Organization*?
An organization that has contact people at the top and the CEO at the bottom of the organizational chart.
What is *Competitive Benchmarking*?
Rating an organization's practices, processes, and products against the world's best.
What is *Outsourcing*?
Assigning various functions, such as accounting and legal work, to outside organizations.
What are *Core Compencies*?
Those functions that the organization can do as well or better than any other organization in the world.
What is *Organizational or Corporate Culture*?
Widely shared values within an organization that provide coherence and cooperation to achieve common goals.
Define the *Formal Organization*
The structure that details lines of responsibility, authority, and position; that is, the structure shown on organizational charts.
Define the *Informal Organization*?
The system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that does not appear on any organizational chart.

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