MANAGEMENT SKILLSChapter 11

OBJECTIVES

Explain how horizontally organized companies differ from vertically organized companies

Name the 3 levels of management in a vertically organized company

Explain how self management teams function

STANDARD

Marketing 2 Standard 3: - Distinguish the differences between horizontally and vertically organized companies. Explain how self management teams function.

MANAGEMENT STRUCTURES

MANAGEMENT

The business function of planning, organizing, and controlling all available resources to achieve company goalsHorizontalVertical

VERTICAL ORGANIZATION

A hierarchical, up-and-down, organizational structure in which the tasks and responsibilities of each level are clearly defined

In large, traditional companies, managers reported to higher levels of managementResponsible for the proper operation of a particular department

MANAGEMENT LEVELS

Top Management: people that make decisions that affect the whole companyCEO, president, COO, CFO, CMO, and VPSet a direction for the company as a whole, identifying resources & methods for meeting goals, and controlling the systems & structures of the company

MANAGEMENT LEVELS

Middle Management: implement the decisions of top managementPlans how the departments under them can work to reach top managements goals

Supervised by top management Involves implementation more than it does supervisionThey monitor the effectiveness of the plans they implement

MANAGEMENT LEVELS

Supervisory-Level Management: supervise the employees who actually carry out the tasks determined by middle & top managementAssign duties, monitor day-to-day activities in their dept., & evaluate work of production or service employees

Set priorities for departments, work to keep within budgets, & monitor teams’ workflow

Supervised by middle management

HORIZONTAL ORGANIZATION

Top management shares decision making with self-managing teams of workers who set their own goals and make their own decisions

SELF-MANAGING TEAMS

Levels of management are eliminated Number of supervisors is reduced Gather information, analyze it, and take collective action

Responsible for making decisions, completing tasks, & coordinating their activities with other groups in the company

Empowerment reinforces team spirit, contributes to company loyalty, and increases productivity & profit

ORGANIZATION BY PROCESS

Self-Managing Teams are organized around particular processesDeveloping new products or providing customer support

Teams made up of people with different specializations replace functional divisions Like finance dept or engineering dept

On a product development team, employees may research market trends, while others may be experts in technology or budgeting & finance, but they all work TOGETHER to make new products.

CUSTOMER ORIENTATION

In vertical organizations, workers look to mgmt. for direction

In horizontal companies, workers focus on the customer You can buy Starbuck’s Coffee beans in Starbuck’s Coffee shops; or you can go get it at a grocery store Different marketing teams within Starbuck’s focus on different types of customers

Managers have direct access to customer feedback

Ideal result is to have satisfied customers, high productivity, large profits, and contented investors

MATRIX MANAGEMENT

A cross between vertical and horizontal types of management with features borrowed from both types

Individual employees are responsible to a supervisor in their department (vertical) and to their team (horizontal)

Places employees where they are most needed

Why is switching from vertical to horizontal organization called flattening the organization? The management structure has fewer levels, but each level is broader

From a company’s point of view, what is an advantage to horizontal organization? The company saves money because there are fewer managers, and productivity typically increases as employees feel more empowered

Do you think that horizontal organization could work in a high school? Why or why not?