Chapter 7 Business Management - Loudoun County Public Schools

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Chapter 7

Business Management

Section 7.2

Management Structures

Read to Learn Identify the differences between management structures.

Name six skills necessary for effective management.

The Main Idea

Businesses have many different management structures that they can adopt. People who are interested in management should pay attention to the skills and knowledge needed to be an effective manager.

Key Concepts Managerial Structures

Is Being a Manager for You?

Key Term

line authority

an organizational structure in which managers on one level are in charge of those beneath them

an organizational structure with a

line and staff direct line of authority as well as

authority

staff who advise the line personnel

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Key Term

centralized organization

an organizational structure in which authority is with top management

an organizational structure that decentralized gives authority to a number of organization different managers

Key Term departmentalization

an organizational structure that divides responsibility among specific units, or departments

entry-level job

a beginner-level position

Managerial Structures

An advantage of the line authority structure is that authority is clearly defined.

line authority an organizational structure with managers on one level are in charge of those beneath them

Managerial Structures

The line and staff authority structure enables managers to get advice. It can also lead to overstaffing.

line and staff authority an organizational structure in which has a direct line of authority as well as staff who advise the line personnel

Figure 7.2

Line and Staff Authority Organization Chart

Managerial Structures

Decentralized organizations are often found in international businesses.

decentralized organization an organization that gives authority to a number of different managers

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Formal Structure

Formal structures usually employ departmentalization.

departmentalization an organizational structure that divides responsibility among specific units, or departments

Informal Structure

A business can be run informally if it does not need a big marketing or distribution network.

Informal structures are more flexible than formal structures.

Employee Input

Forward-looking companies are on a new track to encourage worker participation, new ways of thinking, and a move away from formal structure.

Is a Manager's Job for You?

Most managers begin their career in an entry-level job.

entry-level job a beginner-level position

Graphic Organizer

Entry Level

Gain Experience

Promotion

Graphic Organizer

Skills Needed by Managers

TaskOriented

Keep Accurate Records

Work Under Pressure

Manage Time Effectively

Communicate Well

Human Relations

Understanding the Business

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Graphic Organizer

More control over time

More money

Advantages of Being a Manager

Greater influence

Respect

Prestige

Graphic Organizer

Blamed when things go wrong

Mistakes are costly

Disadvantages of Being a Manager

Pressure

1. What is an advantage of a line and staff authority organization structure over a line authority organization?

Line and staff authority structure enables management to get advice from staff personnel.

2. Why do some businesses use a decentralized organization?

They allow decisions to be made at the local level where managers are more familiar with the problems and have the resources to solve them.

3. What are some characteristics of an effective manager?

task-oriented, able to work under pressure, effective communicator, works well with others, and technical knowledge

End of Chapter 7

Business Management

Section 7.2

Management Structures

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