By Jamie Lewis,2014-04-08 16:06
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    Unit 1 Company Structure

    1 How are companies organized?

    ; The first step in organizing a business enterprise.

     Who will do what job?

     How people doing the jobs are grouped together?

    Job Specialization

    ; Job Specialization is a process in job design whereby a firm’s overall job is broken down

    into smaller parts. Each part is then given to an individual who is specialized in doing that

    bit of the job.

    ; Specialization can increase efficiency, and in case an employee leaves, make the training

    of the replacement easier.

    ; But if the specialization goes too far, the job would be too narrow in scope and

    monotonous in nature, which will cause boredom, dissatisfaction, low efficiency and even



    ; Departmentalization can be accomplished along:

     functional lines (, production, finance),

     geographic areas (e.g.Harbin, South China, East Asia),

     goods and services produced (e.g.microcomputers and mainframe computers in

    the case of a computer manufacturer; life insurance and automobile insurance in

    the case of an insurance company),

     manufacturing process (e.g.spinning, weaving and dying in textile industry) and

     customers (e.g.personal loan and institutional loans in the case of a commercial


    ; The next step in organizing is to determine:

     Who reports to whom and

     Who calls the shots?

    1-1 A line and Staff Authority

    ; A line organization based on line authority is one in which all authority flows in a direct

    chain of command from the top of the organization to the bottom.

    ; As an organization grows larger and its operations become more complex, the staff

    departments are set up to aid the line departments but the former have no authority to

    make final decisions for the later.

    ; Such a structure has been widely adopted, particularly in large companies. Advantages and disadvantages:

     The authority and responsibility are clearly defined, and the everyone has one

    and only one boss. Therefore, decisions can be made and carried out quickly.

     High cost of maintaining staff departments and the occasional resentment from

    the line departments for having to listen to the staff specialists.

    1-2 Functional Organization

    Advantages and disadvantages:

     The main strength of such an organizational structure is that, by placing like

    specialists in the same department, it can minimize duplication of personnel and

    equipment and increase efficiency.


     In pursuing functional goals, different departments often lose sight of the

    organization’s goals, and no one is totally accountable for the final outcome as a

    whole. Besides, functional managers working in their own departments do not

    get adequate training which would prepare them as future senior managers who

    need a much broader perspective on the organization.

    1-3 A Divisional Organization

    Advantages and disadvantages:

     The division managers enjoy a high degree of autonomy and are totally

    responsible for the performance of their divisions. Compared with functional

    managers, division managers are better candidates for senior managers.

     It causes duplication of activities and resources.

    1-4 Matrix Organization

    Advantages and disadvantages:

     A matrix organization is cost-effective for work on new products.

     It may cause confusion because one employee has more than one superior.

    Moreover, such an organization is temporary in nature and, therefore, long-term

    working relationship are difficult to develop.

    1-5 Committee Organization

    ; A committee organization is an organization in which people from different areas are

    brought together to study problems and make decisions on them.

    ; A committee which is established on a permanent basis known as a standing committee,

    and one which is set up to solve a specific task and then dissolved is called an ad hoc


    ; Committee could be independent organizations, but most of them work in combination

    with one of the above discussed forms of organization.

    Advantages and disadvantages:

    ; It usually takes a longer time for a committee to make a decision and the decision

    may result from compromises. For problems involving complex issues, however,

    committee organization is often the most desirable form because it draws on the

    expertise of all its members and can tackle the problems in greater depth.

    1-6 Informal Organization

    ; Communication in a company, a grapevine.

    ; Grapevine can facilitate the communication networking of a company. Advantages and disadvantages:

     The grapevine can spread information more rapidly than formal channels.

     It can also help build rapport among people within and across their work units,

    which will in turn foster team spirit, and facilitate coordination and cooperation

    within the company.

    Unit 2 Labor-Management Relations

    2-1 Labor Unions

     What are labor /trade unions?

     Labor unions or trade unions are organizations that attempt to represent worker’s interests.

    They negotiate with employers about the wages, working hours and working conditions

    of their members.


     What can they do?

     They can defend members who have individual grievances. If dissatisfied, they can take “industrial action” such as going on strike or operating a go-slow or a work-to-rule.

     During a strike they can picket their place of work and try to prevent other workers or delivery drivers entering the premises.

     What are the functions of labor unions?

     Labor unions are a necessary voice for the interests and needs of workers, and that in many countries they have played an enormous dynamic political and economic role.

     Governments and employers that want social peace, and a team-working and dynamic economy, should encourage the existence of trade unions.

    2-2 Management Rights

     What are the management rights?

     Management rights is a term which defines those areas over which management exercises exclusive decision-making authority.

     Two categories of management rights:

     There are two categories of management rights, mandatory or reserved rights, permissive rights.

     Mandatory or reserved rights refer to the right to determine mission, budget,

    internal security.

     Permissive rights are those rights (e.g., numbers, types and grades of employees

    assigned to an organizational subdivision, work project, or tour of duty) that

    management may bargain, but is not statutorily required to do so.

    2-3 Employee Rights

     Employees have the right to form, join or assist a union or to refrain from doing so.