Explain the functions of the informal organization and the grapevine in a business.

Explain the functions of the informal organization and the grapevine in a business.

Informal groups are created by group members to accomplish goals that may or may not be relevant to the organization, and they can be very powerful forces.

The grapevine—the informal communications network within an organization—can be used to transmit information (important or gossip) through an organization much faster than through the formal communication network.

Information transmitted through the grapevine can go in any direction across the organizational structure, skipping up or down levels of management and even across departments.

Understand how committees and task forces are used.

Understand how committees and task forces are used.

Committees and task forces are used to develop organizational structure within an organization.

An ad-hoc committee is created for a specific short-term purpose, whereas a standing committee is relatively permanent.

A task force is created to investigate a major problem or pending decision.

Describe the effects of corporate culture.

Describe the effects of corporate culture.

Corporate culture has both internal and external effects on an organization. An organization's culture can influence the way employees think and act, and it can also determine the public's perception of the organization.

Corporate culture can affect a firm's performance over time, either negatively or positively. Creating a culture of trust, for example, can lead to increased growth, profits, productivity, and job satisfaction, while retaining the best employees, inspiring customer loyalty, developing new markets, and increasing creativity.

In addition, when two or more companies undergo the integration process, their different or similar corporate cultures can affect the success of a merger or acquisition.

Describe the four basic forms of organizational structure.

Describe the four basic forms of organizational structure.

There are four basic forms of organizational structure.

1. The line structure is the oldest and simplest structure, in which the chain of command moves in a straight line from person to person down through the levels of management.

2. The line-and-staff structure is similar to the line structure, but adds specialists called staff managers to assist the line managers in decision making.

3. The line structure works most efficiently for smaller organizations, whereas the line-and-staff structure is used by medium- and large-sized organizations.

4. The matrix structure may be depicted as product departmentalization superimposed on functional departmentalization. With the matrix structure, an employee on a cross-functional team reports to both the project manager and the individual's supervisor in a functional department.

In an organization with a network structure, the primary function performed internally is administration, and other functions are contracted out to other firms.

Understand how the span of management describes an organization.

Understand how the span of management describes an organization.

The span of management is the number of workers who report directly to a manager. Spans generally are characterized as wide (many workers per manager) or narrow (few workers per manager).

Wide spans generally result in flat organizations (few layers of management); narrow spans generally result in tall organizations (many layers of management).

Explain how decentralization follows from delegation.

Explain how decentralization follows from delegation.

Delegation is giving part of a manager's work to other workers.


It involves the following three steps:
(1) assigning responsibility,
(2) granting authority, and
(3) creating accountability.


A decentralized firm is one that delegates as much power as possible to people in the lower management levels. In a centralized firm, on the other hand, power is retained at the upper levels.