| economies of scale | the situation in which companies can reduce their production costs if they can purchase raw materials in bulk; the average cost of goods goes down as production levels increase |
| hierarchy | a system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person |
| chain of command | the line of authority that moves from the top of a hierarhy to the lowest level |
| bureaucracy | an organization with many layers of managers who set rules and regulations and oversee all decisions |
| centralized authority | an organization structure in which decision making authority is maintained at the top level of management at the company's headquarters |
| decentralized authority | an organization structure in which decision making authority is delegated to lower level managers more familiar with local conditions than headquarters management could be |
| span of control | the optimum number of subordinates a manager supervises or should surpervise |
| tall organization structure | an organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of magement |
| flat organization structure | an organization structure that has few layers of management and a broad span of control |
| departmentalization | the dividing of organizational functions into separate units |
| line organization | an organization that has direct two-way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with all people reporting to only one supervisor |
| line personnel | employees who are part of the chain of command that is responsible for achieving organizational goals |
| staff personnel | employees who advise and assist line personnel in meeting their goals |
| matrix organization | an organization in which specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure |
| cross-functional self-managed teams | groups of employees from differrent departments who work together on a long-term basis |
| networking | using communications technology and other means to link organiztions and allow them to work together on common objectives |
| real time | the present moment or the actual time in which something takes place |
| transparency | a concept that describes a company being so open to other companies working with it that the once-solid barriers between them become see-through and electronic information is shared as if the companies were one |
| virtual corporation | a temporary networked organization made up of replaceable firms that join and leave as needed |
| benchmarking | coomparing an organizations practices, processes, and products against the worlds best |
| core competencies | those functions that the organization can do as well as or better than any other organization in the world |
| restructuring | redesigning an organization so that it can more effectively and efficiently serve its customers |
| inverted organization | n organization that has contact people at the top and the chief executive officer at the bottom of the organization chart |
| organizational (or corporate) culture | widely shared values within an organization that provide unity and cooperation to achieve common goals |
| formal organization | the structure that details lines of responsibility, authority, and position; that is, the structure shown on organization charts |
| informal organization | the system of relationships and lines of authority that develops spontaneously as employees meet and form power centers; that is, the human side of the organization that does not appear on any organization chart |