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Organization and Teamwork


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Organization and Teamwork

Effective Organization Structure

Divide Responsibilities

Distribute Authority

Coordinate and Control Work

Promote Accountability

The decision-making authority of employees and managers is supported by the companyís organization structure. This structure helps the company achieve its goals by providing a framework for managers to divide responsibilities, effectively distribute the authority to make decisions, coordinate and control the organizationís work, and hold employees accountable for their work.

Organization Chart

When managers design the organizationís structure, they use an organization chart to provide a visual representation of how employees and tasks are grouped and how the lines of communication and authority flow.

An organization chart depicts the official design for accomplishing tasks that lead to achieving the organizationís goals, a framework known as the formal organization. Every company also has an informal organizationĖthe network of interactions that develop on a personal level among workers. Sometimes the interactions among people in the informal organization parallel their relationships in the formal organization, but often interactions transcend formal boundaries. Crossing formal boundaries can help establish a more pleasant work environment, but it can also undermine formal work processes and hinder a companyís ability to get things done.

Four factors must be taken into consideration when designing an effective organization structure: work specialization, chain of command, vertical organization, and horizontal organization and coordination.

Organization Chart for Food Lion Grocery Chain

Many organization charts look like this one, for Food Lion. The traditional model of an organization is a pyramid in which numerous boxes for the base and lead up to fewer and fewer boxes on higher levels, ultimately arriving at one box at the top. A glance at Food Lionís organization chart reveals who has authority over whom, who is responsible for whose work, and who is accountable to whom.

Work Specialization







Before designing an organizational structure, management must first decide on the optimal level of work specializationĖthe degree to which organizational tasks are broken down into separate jobs.

Few employees have the skills to perform every task a company needs. Therefore, work specialization can improve organizational efficiency by enabling each worker to perform tasks that are well defined and that require specific skills. However, organizations can overdo specialization. If a task is defined too narrowly, employees may become bored with performing the same tiny, repetitious job over and over. They may also feel unchallenged and alienated.

Chain of Command





Besides incorporating work specialization into an organizational structure, companies must also establish a chain of command, the unbroken line of authority that connects each level of management with the next level. The chain of command helps organizations function smoothly by making two things clear: who is responsible for each task, and who has the authority to make official decisions.

All employees have a certain amount of responsibilityĖthe obligation to perform the duties and achieve the goals and objectives associated with their jobs. As they work toward the organizationís goals, employees must also maintain their accountability, their obligation to report the results of their work to supervisors or team members and to justify any outcomes that fall below expectations. Managers ensure that tasks are accomplished by exercising authority, the power to make decisions, issue orders, carry out actions, and allocate resources to achieve the organizationís goals. Authority is vested in the positions that managers hold, and it flows down through the management pyramid. Delegation is the assignment of work and the transfer of authority and responsibility to complete that work.

Simplified Line-and-Staff Structure

The simplest and most common chain-of-command system is known as line organization because it establishes a clear line of authority flowing from the top down, as the Food Lion chart depicts. Everyone knows who is accountable to whom, as well as which tasks and decisions each is responsible for. However, line organization sometimes falls short because the technical complexity of a firmís activities may require specialized knowledge that individual managers donít have and canít easily acquire. A more elaborate system called line-and-staff organization was developed out of the need to combine specialization with management control. In such an organization, managers in the chain of command are supplemented by functional groupings of people known as staff, who provide advice and specialized services but who are not in the line organizationís chain of command.

Span of Management

The number of people a manager directly supervises is called the span of management or span of control. When a large number of people report directly to one person, that person has a wide span of management. This situation is common in flat organizations with relatively few levels in the management hierarchy. In contrast, tall organizations have many hierarchical levels, usually with only a few people reporting to each manager. In such cases, the span of management is narrow.

The chart above compares a tall versus a flat organization. The U.S. Army is a tall organization. It has many levels with a narrow span of management at each level so that relatively few people report to each manager on the level above them. In contrast, a flat organization, such as the Catholic Church, has relatively few levels with a wide span of management; therefore, more people report to each manager.

Decision-Making Authority

Organizations that focus decision-making authority near the top of the chain of command are said to be centralized. Centralization benefits a company by utilizing top managementís rich experience and broad view of organizational goals. Both line organizations and line-and-staff organizations tend to be centralized.

However, the trend in business today is to decentralize. As Arthur Wainwright discovered, decentralization pushes decision-making authority down to lower organizational levelsĖsuch as department headsĖwhile control over essential company-wide matters remains with top management. Implemented properly, decentralization can stimulate responsiveness because decisions donít have to be referred up the hierarchy.

Vertical Organizations





Many organizations use a traditional vertical structure to define formal relationships and the division of tasks among employees and managers. Vertical organization links the activities at the top of the organization with those at the middle and lower levels. In a vertical organization, companies define jobs and activities by using departmentalization--the arrangement of activities into logical groups that are then clustered into larger departments and units that form the total organization. Four common ways of departmentalizing are by function, division, matrix, and network. An organization may use more than one method of departmentalization, depending on its particular needs.

Departmentalization by Function


Resource Use


Departmentalization by function groups employees according to their skills, resource use, and expertise. Common functional departments include marketing, human resources, operations, finance, research and development, and accounting, with each department working independently of the others.

Functional Departments

Splitting the organization into separate functional departments offers several advantages: (1) Grouping employees by specialization allows for the efficient use of resources and encourages the development of in-depth skills; (2) centralized decision making enables unified direction by top management; and (3) centralized operations enhance communication and the coordination of activities within departments.

Despite these advantages, functional departmentalization can create communication barriers between departments, thereby slowing response to change, hindering effective planning for products and markets, and overemphasizing work specialization (which alienates employees). Moreover, employees may become too narrowly focused on departmental goals and lose sight of larger company goals. For these reasons, most large companies have abandoned the functional structure in the past decade or so.

Departmentalization by Division





Many organizations use a traditional vertical structure to define formal relationships and the division of tasks among employees and managers. Vertical organization links the activities at the top of the organization with those at the middle and lower levels. In a vertical organization, companies define jobs and activities by using departmentalization--the arrangement of activities into logical groups that are then clustered into larger departments and units that form the total organization. Four common ways of departmentalizing are by function, division, matrix, and network. An organization may use more than one method of departmentalization, depending on its particular needs.

Departmentalization by Division

Divisional departmentalization offers both advantages and disadvantages. First, because divisions are self-contained, they can react quickly to change, thus making the organization more flexible. In addition, because each division focuses on a limited number of products, processes, customers, or locations, divisions can offer better service to customers. Moreover, top managers can focus on problem areas more easily, and managers can gain valuable experience by dealing with the various functions in their divisions.

However, divisional departmentalization can also increase costs by duplicating the use of resources such as facilities and personnel. Furthermore, poor coordination between divisions may cause them to focus too narrowly on divisional goals and neglect the organizationís overall goals. Finally, divisions may compete with one another for employees, money, and other resources, causing rivalries that hurt the organization as a whole.

Departmentalization by Matrix

Departmentalization by matrix is a structural design in which employees from functional departments form teams to combine their specialized skills. This structure allows the company to pool and share resources across divisions and functional groups. The matrix may be a permanent feature of the organizationís design, or it may be established to complete a specific project.

Matrix departmentalization can help big companies function like smaller ones by allowing teams to devote their attention to specific projects or customers without permanently reorganizing the companyís structure. But matrix structures are not without drawbacks. One problem of a matrix structure is that team members usually continue to report to their functional department heads as well as to a project team leader. Another drawback is that authority tends to be more ambiguous and up for grabs, creating power struggles and other interpersonal conflicts.

In a matrix organization, excellent communication and coordination are necessary to avoid conflicts.

Departmentalization by Network

Departmentalization by network is a method of electronically connecting separate companies that perform selected tasks for a headquarters organization. Also called a virtual organization, the network organization outsources engineering, marketing, research, accounting, production, distribution, or other functions.

The biggest advantage of the network structure is its flexibility. Companies hire whatever services are needed and then change them once they are no longer needed. The limited hierarchy required to manage a network organization also permits the company to make decisions and react to change quickly. Additional advantages are that the organization can continually redefine itself, and a lean structure usually means employees have greater job variety and satisfaction.

However, the network approach lacks hands-on control, because the functions are not in one location or company. Also, if one company in the network fails to deliver, the headquarters organization could suffer or even go out of business. Finally, strong employee loyalty and team spirit are less likely to develop, because the emotional connection between the employee and the organization is weak.

Innovative Structures

Horizontal Organization

Hybrid Organization

More and more businesses are transforming their traditional bureaucratic and hierarchical vertical structure into a horizontal organization. The horizontal organization uses the team concept to flatten hierarchies and integrate the many tasks of a business into a few smooth-flowing operations. The biggest benefit of horizontal organization is that everyone works together. Employees from various departments or functions are grouped around a few organization-wide, cross-functional core processes, and they are responsible for an entire core process from beginning to end. A typical core process group might include staff from finance, research and development, manufacturing, and customer service. All core processes lead to one objective: creating and delivering something of value to the customer.

While some companies completely dismantle their vertical structure to create horizontal organizations, others prefer a hybrid organizationĖone that combines vertical and horizontal functions. In these firms, core processes are supported by organization-wide functional departments such as human resources and finance.

Comparing Work Groups and Work Teams

A team is a unit of two or more people who work together to achieve a goal. Teams differ from work groups in that work groups interact primarily to share information and to make decisions to help one another perform within each memberís area of responsibility. In other words, the performance of a work group is merely the summation of all group membersí individual contributions.

By contrast, the members of a team have a shared mission and are collectively responsible for their work. By coordinating their efforts, team members generate a positive synergy and achieve a level of performance that exceeds what would have been accomplished if members had worked individually.

Workplace Teams




The type, structure, and composition of individual teams within an organization all depend on the organizationís strategic goals and the objective for forming the team.

The most common type of informal team is the problem-solving team.  Also referred to as quality circles, problem-solving teams usually consist of 5 to 12 employees from the same department who meet voluntarily to find ways of improving quality, efficiency, and the work environment.

As the name implies, self-managed teams manage their own activities and require minimum supervision. Typically they control the pace of work and determination of work assignments.

Functional teams, or command teams, are organized along the lines of the organizationís vertical structure and thus may be referred to as vertical teams. They are composed of managers and employees within a single functional department. The structure of a vertical team typically follows the formal chain of command.

Types of Cross-Functional Teams

Task Forces



Cross-functional have many benefits: (1) they facilitate the exchange of information between employees, (2) they generate ideas for how to best coordinate the organizational units that are represented, (3) they encourage new solutions for organizational problems, and (4) they aid the development of new organizational policies and procedures.

At Harley-Davidson, there are three cross-functional teams called Circlesóthe Create Demand Circle, the Produce Product Circle, and the Provide Support Circle. The cross-functional circles are responsible for every motorcycle produced by Harleyófrom product conception to final design. Besides permanent circles such as the ones used at Harley-Davidson, cross-functional teams can take on a number of formats:

A task force is a type of cross-functional team formed to work on a specific activity with a completion point. However, once the goal has been accomplished, the task force is disbanded. Special-purpose teams are created as temporary entities to achieve specific goals. However, special-purpose teams are different because they exist outside the formal organization hierarchy. Such teams remain a part of the organization but have their own reporting structures, and members view themselves as separate from the normal functions of the organization. In contrast to a task force, a committee usually has a long life span and may become a permanent part of the organization structure. Committees typically deal with recurring tasks.

Virtual Teams

Project-management skills

Time-management skills

Technological expertise

Cross-cultural skills

Interpersonal awareness

Virtual teams are groups of physically dispersed members who work together to achieve a common goal. Virtual team members communicate using a variety of technological formats and devices such as company intranets, e-mail, electronic meeting software, and telephones. Occasionally, they may meet face-to-face. The biggest advantage of virtual teams is that members are able to work together even if they are thousands of miles and several time zones apart.

Because virtual teams must function with less direct interaction among members, team members require certain competencies. Among these are project-management skills, time management skills, the ability to use electronic communication and collaboration technologies, the ability to work across cultures, and heightened interpersonal awareness.

Advantages of Teams

Information and Knowledge

Diversity of Views

Acceptance of Solutions

Performance Levels

Organizational Flexibility

Operational Efficiencies

At their best, teams can be an extremely useful forum for making key decisions. The interaction of the participants and the combined intelligence of the group produce better decisions than what would have been achieved had the members worked independently. In short, team decision making can benefit an organization by delivering:

Increased information and knowledge. By pooling the resources of several individuals, teams bring more information to the decision-making process.

Increased diversity of views. Team members bring a variety of perspectives to the decision-making process.

Increased information and knowledge. By pooling the resources of several individuals, teams bring more information to the decision-making process.

Increased diversity of views. Team members bring a variety of perspectives to the decision-making process.

Higher performance levels. Working in teams can unleash vast amounts of creativity and energy in workers who share a sense of purpose and mutual accountability.

Increased organizational flexibility. Employees who work in teams become familiar with the work performed by other employees.

Increased operational efficiencies. Companies that use teamwork to organize, plan, and control activities enjoy greater productivity, increased profits, fewer defects, lower employee turnover, less waste, and even increased market value.

Disadvantages of Teams


Lost Productivity


Hidden Agendas

Free Riders

High Costs

Although teamwork has many advantages, it also has a number of potential disadvantages. At their worst, teams are unproductive and frustrating, and they waste everyoneís time. Some may actually be counterproductive, because they may arrive at bad decisions. For instance, when individuals are pressured to conform, they may abandon their sense of personal responsibility and agree to ill-founded plans. Similarly, a team may develop groupthink, the willingness of individual members to set aside their personal opinions and go along with everyone else, simply because belonging to the team is more important to them than making the right decision.

Some team members may have a hidden agendaóprivate motives that affect the groupís interaction. Other team members may be free ridersóteam members who donít contribute their fair share to the groupís activities because they arenít being held individually accountable for their work. Still another drawback to teamwork is the high cost of coordinating group activities. Aligning schedules, arranging meetings, and coordinating individual parts of a project can eat up a lot of time and money. The fact is that teams simply arenít effective for all situations.

Five Stages of Team Development






Research shows that teams typically go through five definitive stages of development.

Forming. The forming stage is a period of orientation and breaking the ice. Members get to know each other, determine what types of behaviors are appropriate within the group, identify what is expected of them, and become acquainted with each otherís task orientation.

Storming. In the storming stage, members show more of their personalities and become more assertive in establishing their roles. Conflict and disagreement often arise during the storming stage as members jockey for position or form coalitions to promote their own perceptions of the groupís mission.

Norming. During the norming stage, these conflicts are resolved, and team harmony develops. Members come to understand and accept one another, reach a consensus on who the leader is, and reach agreement on what each memberís roles are.

Performing. In the performing stage, members are really committed to the teamís goals. Problems are solved, and disagreements are handled with maturity in the interest of task accomplishment.

Adjourning. Finally, if the team has a limited task to perform, it goes through the adjourning stage after the task has been completed. In this stage, issues are wrapped up and the team is dissolved.

The Level of Team Cohesiveness

As the team moves through the various stages of development, three things happen. First, the team develops a certain level of cohesiveness, a measure of how committed the members are to the teamís goals. The teamís cohesiveness is reflected in meeting attendance, team interaction, work quality, and goal achievement. Cohesiveness is influenced by many factors. Two primary factors are competition and evaluation. If a team is in competition with other teams, cohesiveness increases as the team strives to win. In addition, if a teamís efforts and accomplishments are recognized by the organization, members tend to be more committed to the teamís goals. Strong team cohesiveness generally results in high morale. Moreover, when cohesiveness is coupled with strong management support for team objectives, teams tend to be more productive.

The Emergence of Team Norms

The second thing that happens as teams develop is the emergence of normsóinformal standards of conduct that members share and that guide their behavior. Norms define what is acceptable behavior. They also set limits, identify values, clarify what is expected of members, and facilitate team survival. Norms can be established in various ways: from early behaviors that set precedents for future actions, from significant events in the teamís history, from behaviors that come to the team through outside influences, and from a leaderís or memberís explicit statements that have an impact on other members.

Team Member Roles

For a team to be successful over time, it must also be structured to accomplish its task and to satisfy its membersí needs for social well-being. Effective teams usually fulfill both requirements with a combination of members who assume one of four roles: task specialist, socioemotional role, dual role, or nonparticipator.

People who assume the task-specialist role focus on helping the team reach its goals. In contrast, members who take on the socioemotional role focus on supporting the teamís emotional needs and strengthening the teamís social unity. Some team members are able to assume dual roles, contributing to the task and still meeting membersí emotional needs. These members often make effective team leaders. At the other end of the spectrum are members who are nonparticipators, contributing little to reaching the teamís goals or to meeting membersí emotional needs.

Effective Teams

Clear Goals

Strong Leadership

Focused Efforts

Two factors that have made Microsoft teams so successful are clear goals and strong leadership. Although the teamís goals may be set by either the team or upper management, the team leader makes sure the team stays on track to achieve its goals. Team leaders are often appointed by senior managers, but sometimes they emerge naturally as the team develops.

Clear sense of purpose. Team members clearly understand the task at hand, what is expected of them, and their role on the team.

Effective Teams

Focused Efforts



Focused. Team members get to the core issues of the problem and stay focused on key issues.

Open and honest communication. The team culture encourages discussion and debate. Team members speak openly and honestly, without the threat of anger, resentment, or retribution. They listen to and value feedback from others. As a result, all team members participate.

Diverse membership. Effective teams are comprised of stakeholders, creative thinkers, and members who have a wide range of views.

Effective Teams

Appropriate Size

Creative Thinking

Consensus Decision-Making

Team size is another important factor that contributes to a teamís overall effectiveness. The optimal size for teams is generally thought to be between 5 and 12 members.

Creative thinking. Effective teams encourage original thinking, considering options beyond the usual.

Decision by consensus. All decisions are arrived at by consensus. No easy, quick votes are taken. Instead, all members express their opinions and engage in debate. The decision that emerges is generally supported by all team members.

Team Conflict

Competition for scarce resources

Responsibility issues

Poor communication

Values, attitudes, and personalities

Authority issues

Goal incompatibility

Conflict can be both constructive and destructive to a teamís effectiveness. Conflict is constructive if it increases the involvement of team members and results in the solution to a problem. Conflict is destructive if it diverts energy from more important issues, destroys the morale of teams or individual team members, or polarizes or divides the team.

Team conflicts can arise for a number of reasons. First, teams and individuals may feel they are in competition for scarce or declining resources, such as money, information, and supplies. Second, team members may disagree about who is responsible for a specific task; this type of disagreement is usually the result of poorly defined responsibilities and job boundaries. Third, poor communication can lead to misunderstandings and misperceptions about other team members or other teams. In addition, intentionally withholding information can undermine trust among members. Fourth, basic differences in values, attitudes, and personalities may lead to clashes. Fifth, power struggles may result when one party questions the authority of another or when people or teams with limited authority attempt to increase their power or exert more influence. Sixth, conflicts can arise because individuals or teams are pursuing different goals.

Dealing With Conflict

Each team member has a unique style of dealing with conflict, but the membersí styles are primarily based on how competitive or cooperative team members are when a conflict arises. Avoidance may involve ignoring the conflict in the hope that it will subside on its own, or it may even involve physically separating the conflicting parties. Defusion may involve several actions, including downplaying differences and focusing on similarities between team members or teams, compromising on the disputed issue, taking a vote, appealing to a neutral party or higher authority, or redesigning the team. Confrontation is an attempt to work through the conflict by getting it out in the open, which may be accomplished by organizing a meeting between the conflicting parties.

These three styles of conflict resolution come into play after a conflict has developed, but team members and team leaders can take several steps to prevent conflicts. First, by establishing clear goals that require the efforts of every member, the team reduces the chance that members will battle over their objectives or roles. Second, by developing well-defined tasks for each member, the team leader ensures that all parties are aware of their responsibilities and the limits of their authority. And finally, by facilitating open communication, the team leader can ensure that all members understand their own tasks and objectives as well as those of their teammates.


organizational structure: Framework enabling managers to divide responsibilities, ensure employee accountability, and distribute decision-making authority

organization chart: Diagram showing how employees and tasks are grouped and where the lines of communication and authority flow

formal organization: A framework officially established by managers for accomplishing tasks that lead to achieving the organization's goals

informal organization: Network of informal employee interactions that are not defined by the formal structure

work specialization: Specialization in or responsibility for some portion of an organization's overall work tasks; also called division of labor

chain of command: Pathway for the flow of authority from one management level to the next

responsibility: Obligation to perform the duties and achieve the goals and objectives associated with a particular position

accountability: Obligation to report results to supervisors or team members and to justify outcomes that fall below expectations

authority: Power granted by the organization to make decisions, take actions, and allocate resources to accomplish goals

delegation: Assignment of work and the authority and responsibility required to complete it

line organization Chain-of-command system that establishes a clear line of authority flowing from the top down

line-and-staff organization :Organization system that has a clear chain of command but that also includes functional groups of people who provide advice and specialized services

span of management: Number of people under one manager's control; also known as span of control

flat organizations : Organizations with a wide span of management and few hierarchical levels

tall organizations Organizations with a narrow span of management and many hierarchical levels

centralization: Concentration of decision≠making authority at the top of the organization

Decentralization Delegation of decision-making authority to employees in lower-level positions

vertical organization Structure linking activities at the top of the organization with those at the middle and lower levels

departmentalization: Grouping people within an organization according to function, division, matrix, or network

departmentalization by function: Grouping workers according to their similar skills, resource use, and expertise

departmentalization by division: Grouping departments according to similarities in product, process, customer, or geography

product divisions: Divisional structure based on products

process divisions: Divisional structure based on the major steps of a production process

customer divisions: Divisional structure that focuses on customers or clients

geographic divisions Divisional structure based on location of operations

departmentalization by matrix: Assigning employees to both a functional group and a project team (thus using functional and divisional patterns simultaneously

departmentalization by network: Electronically connecting separate companies that perform selected tasks for a small headquarters organization

team: A unit of two or more people who share a mission and collective responsibility as they work together to achieve a goal

problem-solving team: Informal team of 5 to 12 employees from the same department who meet voluntarily to find ways of improving quality, efficiency, and the work environment

self-managed teams: Teams in which members are responsible for an entire process or operation

functional teams: Teams whose members come from a single functional department and that are based on the organization's vertical structure

cross-functional teams: Teams that draw together employees from different functional areas

task force: Team of people from several departments who are temporarily brought together to address a specific issue

special-purpose teams: Temporary teams that exist outside the formal organization hierarchy and are created to achieve a specific goal

committee: Team that may become a permanent part of the organization and is designed to deal with regularly recurring tasks

virtual teams: Team that uses communication technology to bring geographically distant employees together to achieve goals

free riders: Team members who do not contribute sufficiently to the group's activities because members are not being held individually accountable for their work

cohesiveness: A measure of how committed the team members are to their team's goals

norms: Informal standards of conduct that guide team behavior


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