Introduction

One of the most important tasks for the management of any organization employing more than a few people is to determine its organizational structure, and to change this when and where necessary. That’s the heart of what we are going to talk about today in our Chapter 3 Company Structure from our Audio Business Course from English Plus Podcast.

Our learning objectives for this chapter:

  • Consider the different ways of organizing work
  • Discuss potential conflicts between different department in a company
  • Compare the differences between large and small companies

Podcast Episode


Lead-In Discussion

  • Which department — production, finance, accounting, marketing, sales, human resources, etc. — of an organization do you think is the most interesting to work in and why?
  • What reasons can you think of for why departments get into conflict with each other?
  • Is it better to have one immediate boss or to work for more than one manager?
  • Do you prefer to work alone or in a team?
  • Is it more motivating to be responsible to someone for your work, or responsible for people who report to you?

You can discuss these questions on your own, with your friends or family or you can share your ideas with us in the forum.


Wikinomics

The main idea of wikinomics is to collaborate with people outside the traditional corporate structure, letting people around the world cooperate to improve an operation or solve a problem, and paying them for their ideas, of course. This might be similar to outsourcing, but it extends further than the scope of outsourcing. When you outsource a project, you assign it to a certain person outside your company, but with wikinomics, you’re assigning the task to anyone who can come up with a good idea or a solution to one of your problems.

The word wiki comes from the Hawaiian quick and nomics comes from economics, so it literally means quick economics.


Discussion Questions

  1. How is the world of organized work changing?
  2. In what ways could your organization, company or business school use the wikinomics principle?
  3. What do you think are the disadvantages of the wikinomics principle?

You can discuss these questions on your own, with your friends or family or you can share your ideas with us in the forum.


Company Structure

Vocabulary Exercise

Before reading about traditional company organization, check your understanding of some basic terms by choosing the correct words for the definitions below.

a system of authority with different leverls, one above the other, e.g. a series of management positions, whose holders can make decisions, or give orders and instructions
a specific activity in a company, e.g. production, marketing, finance
independent, able to take decisions without consulting somene at the same level or highte in the chain of command
the power to give instructions to people at the level below in the chain of command
to be responsible to someone and to take instruction from them
to give someone else responsibility for doing something instead of you

The Chain of Command

Traditionally, organizations have had a hierarchical or pyramidal structure, with one person or a group of people at the top, and an increasing number of people below then at each successive level. This is sometimes called line structure.

Functional Structure

As the activities of most organizations are too complicated to be organized in a single hierarchy. Most large manufacturing companies, for example, have a functional structure, including, among other, specialized production, finance, marketing, sales and human resources departments. This means, for example, that the production and marketing departments cannot take financial decisions without consulting the finance department.

Flattening Hierarchies and Delegating Responsibility

The modern tendency is to reduce the chain of command, take out layers of management, and make the organization much flatter. Typically the owners of small firms want to keep as much control over their business as possible, whereas managers in larger businesses who want to motivate their staff often delegate decision making and responsibilities to other people.

Matrix Management

Another way to get round hierarchies is to use matrix management, in which people report to more than one superior. For example, a product manager with an idea could deal directly with the managers responsible for a certain market segment and for a geographical region, as well as managers in the finance, sales and production departments.

Teams

A further possibility is to have wholly autonomous, temporary groups or teams that are responsible for an entire project, and are split up as soon as it is successfully completed.


Comprehension Check

Answer the following questions in your own words based on your comprehension of what you read and listened to in the Company Structure part of the chapter. (Don't worry if you don't get the perfect answers as answers may vary, just submit your answers and compare them with the sample answers I have provided. If you get the idea right, it's more than enough.)

What is the main advantage of a chain of command?
Why is it not usually possible to organize a large organization in a single hierarchy?
In what ways can dividing a business funcionally cause problems?
What factors might lead companies to flatten their hierarchies?
According to what you learned in the reading and the listening, what kind of managers might not want to delegate decision making?
What is the potential disadvantage of matrix management systems?
Under what circumstances might teams not be effective?

Verbs and Nouns

Match up the verbs and nouns to make common word combinations. (Sometimes, more than one answer is possible)

delegate
give
make
motivate
take

Incompatible Goals

We talked about the often incompatible goals of the finance, marketing, and production (or operations) departments. Choose the department that would most probably favor the following strategies more than the other two.

a factory working at full capacity
a large advertising budget
a large sales force earning high commission
a standard product without optional features
a strong cash balance
a strong market share for new products
generous credit facilities for customers
high profit margins
large inventories to make sure that products are available
low research and development spending
machines that give the possiblity of making various different products
self-financing (using retained earnings rather than borrowing)

Big and Small Companies

You will be answering questions and discussing the questions and points below based on what you heard in the episode about big and small companies from the accounts of Krishna, Carlo and Olga.


Listening Comprehension

Answer the questions based on the accounts of Krishna, Carlo and Olga and what they said (in the voice of Ben) about big and small companies. (Don't worry if your answers show as incorrect, in short answers, this is mostly the case, just compare your answers with the sample answers I provided. If you have the same ideas in your answer, that's more than enough.)

Why does Krishna say that company size isn't important? What does he say is important?
Why does Carlo recommend university graduates to start in big companies?
What does Carlo say are the differences between big and small companies?
What does Olga say is more important than company size?
What does Olga say about big companies?

Discussion

  1. How far do you share Krishna and Olga’s points of view, and agree with Carlo’s advice?
  2. What other benefits of working in a large company can you think of?
  3. What other reasons might make someone prefer to work in a small company?

Big or Small Company’s Advantages?

Do the following statements usually refer to the advantages of working in a big or a small company?

You are less likely to be affected by a big reorganization or downsizing or merger or takeover.
You are often responsible for a variety of different tasks.
You can actually see the result of your contribution to the firm.
You can be proud of working for a company with a national or international reputation.
You can become more specialized in your work.
You can probably change department if you have problems with your colleagues.
You have more independence, and you don't always have to wait for permission from a superior.
You know everyone in the company and the atmosphere is friendlier.
You may be able to go and work in a foreign subsidiary.
Your company will probably be in a better position in an economic downturn or recession.

Assignment

Write notes for a short presentation on your company or a company you would like to work for. You should mention”

  • what it does: it designs/ makes/ provides/ distributes/ sells/ offer/ organizes/ invests in, etc.
  • where it is located: it has offices/ branches/ subsidiaries/ factories/ stores, etc. in …
  • how it is structured and whether this is a reason for its success: It consists of/ includes/ is divided into/ is organized in, etc.
  • why you want to work for this company.

Deliver the assignment in a presentation form. You can use any presentation software available to you (PowerPoint, Keynote, PowerPoint Online, Google Slides, etc.)

Use the Google Form below to submit your assignment. Grading priority goes to Patrons, but I may have time to grade other assignments as well, and even if I don’t have the time for that, it will be a great exercise for you to put everything you have learned in this chapter into practice. (Please note that you will need to input your email in the form if you would like me to reply)

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